The Chronicle Index of For-Profit Higher Education
August 11
BYLINE: GOLDIE BLUMENSTYK
BLOWING THE WHISTLE: For Career Education Corporation, the bad news continues.in late May, the company revealed that it was being investigated by the civil division of the U.S. Department of Justice as a result of a "false claims" lawsuit that alleges that some of Career Education's colleges had made false statements to the government, allowing them to obtain federal funds for which they were not entitled. The company reported that the Justice Department was seeking documents regarding information that the company gives prospective students about job-placement rates and costs at the unnamed institutions. The company, which said it was cooperating fully with the investigation, said it was also asked to provide information related to compensation of admissions officers and the use of Pell Grants at one institution. False-claims lawsuits are initiated by whistle-blowers when they believe a party has obtained government funds unlawfully. The government can decide to join the case or let the whistle-blowers carry it on themselves. If the accusers prevail, they are entitled to a share in any judgments.
News of the lawsuit came just two weeks after Career Education learned that the U.S. Department of Education had no imminent plans to lift a June moratorium on new campuses.in a letter to the company, the department said it was concerned by the company's "history of noncompliance" with federal laws governing federal financial-aid funds. The department said it also "had some concerns about misrepresentations" by company staff to prospective students at its Brooks College.
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